Risky Business

“Lawrence Powell has brought together a wonderful group of leading insurance and risk scholars to produce the most insightful book on property and casualty insurance industry in many years. Risky Business explains why market-based insurance should be celebrated for its innovation and competitiveness. Instead it is a constant target for politically motivated critics and politicians who excoriate the industry. The book critically examines the continual call for ever-more regulation that harms the public by driving up the cost of insurance and limiting competition and innovation.”

“Did you ever wonder why public officials representing the Gulf Coast states pressured some of the nation’s leading property and casualty insurers into paying claims for damage caused by Hurricane Katrina, even though some hazards clearly were not covered? Or why Congress authorized grants up to $150,000 to homeowners on floodplains that were not covered by federal flood insurance even though such insurance is mandatory? Or why the nearly bankrupt National Flood Insurance Program does not cover the cost of replacing real property, but only the borrower’s remaining mortgage balance? Many such important questions about property and casualty insurance in the U.S. are asked and answered by the scholars assembled by Lawrence Powell in Risky Business. This superb book traces the serious problems facing consumers in insuring properties against fire, flood, earthquakes and other hazards under the Byzantine and politicized regulatory regimes in which insurance companies operate. Risky Business documents the many problems created by today’s regulations, offers and evaluates market-based alternatives, and points the way to reform. It is must reading for anyone interested in the economics and politics of government regulation.”

“Risky Business is a very timely and important book. Each of its well-crafted chapters examines a distinct aspect of the insurance regulatory debate currently taking place, but all lead to the same conclusion: insurance regulation should not be used to distort a well-functioning private insurance market. As the authors point out, insurance regulation can distort insurance markets in ways that hurt consumers, the very people intended to be benefitted. This book should be read by anyone seriously looking at how to effectively benefit and protect insurance consumers.”

“Risky Business is an excellent collection that offers thorough and thoughtful discourse on the current state of evolution in insurance regulation in the United States. Policymakers, consumers, insurance academics, researchers, students, and other interested parties may find this book highly relevant in helping to understand our regulatory history and the status quo, as well as the debate over alternative strategies for reform. The various essays offer a reasonably objective overview of the issues that is fairly clear and understandable for both technical and nontechnical readers.”

“Everyone knows that health insurance is a mess, and many understand that this is the result of government intervention. The insightful book Risky Business shows that health insurance is hardly unique—government intervention imposes costs and inefficiencies on property and casualty insurance (particularly important in areas of storm, flood, fire and other risks). Insurance can seem complex and confusing, leading to misguided calls for regulation, and politicians have been all too eager to respond. Risky Business now charts an essential new course for market-based reform.”